According to a notice issued by Amazon India on its seller forum, the company has implemented a graded cancellation fee structure effective August 17, 2026, with charges now linked to order value rather than the earlier referral-fee-based structure. Under the revised system, orders below ₹10,000 attract a 10% fee, while orders valued between ₹10,001 and ₹50,000 incur an 8% fee. For orders between ₹50,001 and ₹1 lakh, the cancellation fee is 5%, and orders above ₹1 lakh attract a 2% fee. The fee structure applies to sellers using Amazon's Easy Ship and Self Ship services, with an 18% GST applicable to all cancellation charges. As per Amazon, the cancellation fee kicks in whenever a seller cancels an order for reasons other than a direct request from the buyer, or fails to ship the product and confirm dispatch within 24 hours of the estimated shipping date. However, some sellers have questioned why cancellation fees should apply to instances where cancellations were caused by factors outside their control, such as delivery personnel failing to arrive for scheduled pickups. An Amazon spokesperson clarified that "We expect orders placed by customers to be fulfilled reliably by sellers on our marketplace. To encourage timely and dependable fulfilment, we have revised cancellation fees for Easy Ship and Self-Ship seller" and emphasized that "this fee is conditional and only applies in the rare event of a seller-initiated cancellation, which accounts for less than 1 per cent of orders on Amazon.in."
As reported by Amazon India on its seller forum, the company will also increase closing fees for sellers starting September 7, 2026. The revised fees will increase by Re 1 for products priced up to ₹500 and by ₹3 for products priced above ₹500. These closing fees apply to sellers using Amazon's Fulfilment Centre (FC), Easy Ship, and Seller Flex models. A closing fee is charged every time a product is sold on Amazon based on the price range of the product, with the fee varying based on the fulfilment channel a seller is using. The company has attributed the increase to rising fuel and logistics costs, with the difference in total fees between sellers using Amazon's fulfilment network and those on Easy Ship potentially reaching ₹45 per unit on comparable orders, creating an unfair competitive situation according to some sellers. An Amazon spokesperson confirmed that the fee increase is "citing higher fuel and logistics costs" and noted that the company has "measures to protect sellers when cancellations resulted from circumstances beyond their control."
According to sources cited by PTI, Flipkart has introduced a three-tier penalty structure effective August 23, 2026, with charges applied on a per-order basis and ranging from ₹30 to ₹90 depending on the nature of the seller-side failure. A ₹30 penalty applies when sellers fail to hand over orders to Flipkart's logistics partner by the agreed Dispatch By Date (DBD), while a ₹60 penalty applies when sellers cancel orders after receiving them from customers. The penalty rises to ₹90 if sellers miss the DBD and subsequently cancel the order. Under the earlier regime, a DBD breach could result in the seller's account being locked for a period of time, which had a relatively greater impact on the seller's business. Notably, new sellers on Flipkart, up to three months from the start of their selling journey, will not be impacted by this policy. The new structure aims to inculcate better seller behaviour and encourage sellers to plan better, with sellers also rewarded for maintaining good DBD compliance through benefits such as faster settlement of payments and complimentary advertising credits. As per PTI, the revised system was intended to "encourage better fulfilment practices and improve customer experience."
According to PTI reports, these fee revisions by Amazon and Flipkart are creating additional financial burden on small and medium enterprises already operating on thin margins. Vinod Kumar, Trustee of the Forum for Internet Resellers, Sellers and Traders (FIRST INDIA), expressed concern that not every cancellation or delay was caused by the seller, citing logistics failures, platform issues, demand spikes and customer-related factors as other possible causes. Kumar emphasized that "sellers should not become the default financial shock absorbers of the e-commerce ecosystem" and called for transparent attribution of responsibility, reasonable and proportionate penalties, adequate advance notice of fee changes and a simple mechanism to challenge wrongful charges. The timing of these changes coincides with the peak festive shopping season when both platforms typically see increased transaction volumes, with traditional e-tailers using fee hikes to maximize revenue on existing orders while facing growing competition from quick commerce platforms.
